Correlation Between Lakshmi Finance and AU Small
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By analyzing existing cross correlation between Lakshmi Finance Industrial and AU Small Finance, you can compare the effects of market volatilities on Lakshmi Finance and AU Small and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lakshmi Finance with a short position of AU Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakshmi Finance and AU Small.
Diversification Opportunities for Lakshmi Finance and AU Small
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lakshmi and AUBANK is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lakshmi Finance Industrial and AU Small Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AU Small Finance and Lakshmi Finance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lakshmi Finance Industrial are associated (or correlated) with AU Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AU Small Finance has no effect on the direction of Lakshmi Finance i.e., Lakshmi Finance and AU Small go up and down completely randomly.
Pair Corralation between Lakshmi Finance and AU Small
Assuming the 90 days trading horizon Lakshmi Finance Industrial is expected to under-perform the AU Small. In addition to that, Lakshmi Finance is 1.34 times more volatile than AU Small Finance. It trades about -0.18 of its total potential returns per unit of risk. AU Small Finance is currently generating about -0.12 per unit of volatility. If you would invest 60,940 in AU Small Finance on August 31, 2024 and sell it today you would lose (2,360) from holding AU Small Finance or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakshmi Finance Industrial vs. AU Small Finance
Performance |
| Timeline |
| Lakshmi Finance Indu |
| AU Small Finance |
Lakshmi Finance and AU Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakshmi Finance and AU Small
The main advantage of trading using opposite Lakshmi Finance and AU Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakshmi Finance position performs unexpectedly, AU Small can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AU Small will offset losses from the drop in AU Small's long position.| Lakshmi Finance vs. ICICI Securities Limited | Lakshmi Finance vs. Nippon Life India | Lakshmi Finance vs. Fortis Healthcare Limited | Lakshmi Finance vs. ICICI Lombard General |
| AU Small vs. Nalwa Sons Investments | AU Small vs. Tata Investment | AU Small vs. BF Investment Limited | AU Small vs. Kalyani Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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